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Nvidia (NASDAQ: NVDA) decreased by 6% By midday trading Tuesday, despite product announcements, partnerships, and expanded capabilities for generative AI unveiled this week at SIGGRAPH 2024.
Nvidia is now down about 20% Since July 10. The stock is hovering above Its 100-day moving average is $103.66.
“Technical indicators suggest that Nvidia could face a significant pullback in the second half of 2024, similar to patterns seen in other tech stocks over the years,” said Paul Frank, a contributing analyst at Seeking Alpha.
Frank sees Nvidia’s valuation as unsustainable.
“After a year and a half of incredible and consistent technical strength, with very bullish momentum indicators generally confirming the trend, the most serious cracks in the uptrend since late 2022 are beginning to appear,” he said.
Seeking Alpha’s Quant rating system gives Nvidia an F grade.
“Nvidia stock is currently trading at 47 times 2025 fiscal year earnings, which is in line with Cisco’s (CSCO) mid-1998 level (its final peak in March 2000 was 152x!),” according to an analyst and shareholder at Patient Capital Management. “Similarly, the S&P 500 technology sector is trading at 33 times 2024 earnings, which is similar to late 1998 and early 1999. During that period, the gains continued for another 12 to 18 months.”